Selecting the right third-party logistics (3PL) provider can make or break your supply chain operations. While many brands rely on 3PLs to streamline their logistics, the following common pain points arise if expectations and capabilities don’t align. Here are the top five issues brands face with their 3PLs—and actionable solutions to overcome them.
1. Lack of Transparency and Communication
The Issue:
Transparency is critical in logistics, yet many brands struggle with 3PL providers that lack clarity around order statuses, inventory levels, and shipping timelines. Delayed or incomplete updates often leave brands guessing, impacting everything from forecasting to customer satisfaction. For instance, when a shipment is delayed and there’s no proactive notification, it disrupts the entire supply chain. This lack of visibility results in missed deadlines, backorders, and frustrated customers—a nightmare for any brand looking to maintain a strong reputation.
Additionally, unclear or unresponsive communication from a 3PL adds another layer of frustration. When brands can’t reach their 3PL to address urgent issues, it leads to inefficiencies and customer dissatisfaction. The gap between brands’ expectations for transparency and what their 3PL provides is often one of the most significant friction points in the partnership.
The Fix:
To address transparency issues, brands should partner with a 3PL that prioritizes open communication and technology-driven solutions. Here’s how:
- Invest in Technology That Enables Real-Time Visibility:
Modern logistics providers should offer platforms that provide real-time tracking of inventory and shipments. This allows brands to monitor orders from the warehouse to the customer’s door, minimizing guesswork and reducing delays. Advanced dashboards and APIs that integrate directly with your systems provide a consolidated view of your supply chain. - Automated Notifications for Key Updates:
Notifications for order processing, shipping, delays, or inventory changes ensure that you’re always in the loop. A proactive approach to communication reduces the need for constant follow-ups and allows brands to focus on their core operations. - Dedicated Account Support Teams:
A dedicated account manager should act as your single point of contact, providing tailored insights and addressing concerns promptly. This human touch complements technological solutions, ensuring seamless communication during high-stakes situations. - 24/7 Support:
Logistics doesn’t stop at 5 PM, and neither should support. Ensure your 3PL provides round-the-clock assistance so you’re never left waiting during critical moments.
2. Inconsistent Performance and Accuracy
The Issue:
Inconsistent performance in logistics is disastrous for a brand’s reputation and bottom line. Common errors like incorrect order picking, mislabeling, damaged packaging, or delayed shipments lead to frustrated customers, increased returns, and additional costs. Even a small percentage of errors have a ripple effect, causing negative reviews, customer churn, and strain on customer service teams.
For example, imagine a customer orders a specific product, but due to an error, they receive the wrong item. Not only does this require additional time and expense to rectify the issue, but it also impacts customer loyalty and trust. When errors happen repeatedly, they create a perception of unreliability that deters repeat business and harms a brand’s standing in a competitive marketplace.
The Fix:
Achieving consistency and accuracy in logistics starts with selecting the right 3PL partner and implementing robust processes to monitor and maintain high standards. Here’s how brands can tackle performance issues:
- Evaluate a 3PL’s Track Record:
Before partnering, review the provider’s performance metrics, such as order accuracy rates, inventory accuracy, and shipping timeliness. A provider with a proven track record of success—like NBD’s industry-leading 99.98% order accuracy—offers greater peace of mind. - Establish Clear SLAs (Service Level Agreements):
Work with your 3PL to define measurable KPIs that align with your brand’s expectations. SLAs should include metrics such as order accuracy, on-time delivery, and error resolution timelines. Regularly review these KPIs to ensure accountability and identify areas for improvement. - Leverage Technology and Automation:
Advanced technology, such as automated picking and packing systems, reduces human error and ensures precision. Robotics, like those used by NBD, improve efficiency and consistency, particularly for high-volume or complex orders. - Conduct Regular Audits:
Periodically audit your 3PL’s operations to identify any gaps or inefficiencies. Spot-checking orders, monitoring inventory levels, and analyzing error patterns can help you address issues before they escalate. - Foster Open Communication:
Ensure that your 3PL has a robust system for reporting and resolving errors. Clear communication channels make it easier to address problems promptly and prevent repeat mistakes.
3. Limited Scalability During Peak Seasons
The Issue:
One of the most significant challenges brands face is scaling operations during peak seasons or special promotions. Whether it’s the holiday rush, a flash sale, or a viral marketing campaign, these high-demand periods overwhelm a 3PL that isn’t equipped for sudden volume increases. This often leads to delayed shipments, backlogged orders, and strained customer service teams scrambling to manage complaints.
For example, during Black Friday or Cyber Monday, an unprepared 3PL might experience warehouse bottlenecks, delayed order processing, or inventory mismanagement, leaving customers waiting for their purchases. Such disruptions not only erode customer trust but also hinder a brand’s ability to capitalize on peak-season sales opportunities.
The inability to scale effectively during these critical periods results in lost revenue, reputational damage, and a tarnished customer experience—issues that are difficult to recover from in a competitive marketplace.
The Fix:
To overcome scalability challenges, brands must partner with a 3PL built to handle demand surges without compromising speed, accuracy, or quality. Here’s how to ensure your 3PL is up to the task:
- Choose a 3PL with a Flexible Fulfillment Network:
Scalability starts with infrastructure. A 3PL with multiple strategically located fulfillment centers distributes inventory efficiently and reduces the burden on any single warehouse during peak times. This not only ensures faster deliveries but also improves overall operational flexibility. - Leverage Advanced Forecasting Tools:
Work with your 3PL to implement demand forecasting tools that predict order spikes based on historical data, market trends, and upcoming promotions. Providers like NBD use data-driven insights to help brands plan inventory allocation and labor requirements ahead of busy seasons. - Ensure Staffing Flexibility:
A 3PL should have the ability to ramp up staffing quickly during peak periods. Seasonal or temporary workers, coupled with efficient training programs, help maintain order accuracy and processing speed. - Utilize Scalable Technology and Automation:
Automation plays a crucial role in handling large volumes efficiently. Automated picking, packing, and sorting systems process orders faster than manual methods, ensuring timely fulfillment even during demand surges. - Monitor Performance Metrics During Peak Times:
Regularly evaluate your 3PL’s performance during high-demand periods. Metrics such as order cycle time, on-time shipping rates, and error rates provide insights into their scalability and highlight areas for improvement.
4. Hidden Fees and Lack of Cost Transparency
The Issue:
Managing logistics costs is critical for any business, but hidden fees make it nearly impossible to maintain control over your budget. Many 3PLs initially present attractive pricing, only for brands to discover additional charges later—fees for storage, handling, peak season surcharges, or even administrative tasks like inventory reporting. These unexpected costs quickly erode profit margins and derail financial forecasting.
For example, a brand may find itself paying higher rates for inventory stored longer than expected or incurring unexpected surcharges for shipping during peak periods. These unanticipated expenses make it challenging to plan ahead, particularly for growing brands that rely on precise cost management to scale effectively.
The lack of transparency from a 3PL not only strains the brand-provider relationship but can also lead to financial instability, as costs fluctuate without warning.
The Fix:
To avoid budget surprises and maintain cost control, brands need to prioritize 3PLs that offer clear, upfront pricing and flexible fee structures. Here’s how to address hidden fees and ensure cost transparency:
- Understand Pricing Structures Upfront:
Before signing a contract, request a detailed breakdown of all potential fees. Ensure your provider is transparent about costs related to storage, peak periods, packaging materials, and labor surcharges. This will help you identify any red flags before committing. - Opt for Variable Fee Structures:
Choose a 3PL that aligns costs with your actual usage, rather than requiring minimum commitments or fixed fees. Variable pricing ensures you’re only paying for what you use, providing greater flexibility during slower periods. - Look for Providers With No Hidden Fees:
Partner with a 3PL that eliminates unnecessary charges, such as fees for unused storage space or minor service requests. A no-hidden-fee model allows you to accurately forecast logistics costs without surprises. - Regularly Audit Your Logistics Costs:
Periodically review your invoices and compare them against your initial agreement to identify any discrepancies or unexpected charges. This practice ensures accountability and keeps your 3PL in check.
5. Outdated Technology and Processes
The Issue:
Technology plays a pivotal role in modern logistics, yet many 3PLs rely on outdated systems and manual processes that struggle to keep up with the demands of today’s fast-paced supply chains. These inefficiencies manifest in several ways:
- Slow Order Processing: Manual systems often delay picking, packing, and shipping, leading to longer fulfillment times.
- Integration Challenges: Outdated technology may not integrate with your platforms (e.g., e-commerce systems, ERPs, or inventory management tools), creating bottlenecks and data silos.
- Increased Errors: Without automation, human errors in inventory management, labeling, and order fulfillment become more frequent.
- Limited Visibility: Older systems often lack real-time tracking capabilities, leaving brands in the dark about order statuses and inventory levels.
For instance, imagine a brand running an e-commerce flash sale but unable to sync order data with its 3PL’s system in real-time. This leads to delays in fulfillment, overselling inventory, and unhappy customers. These inefficiencies are compounded during high-demand periods, where outdated processes can’t scale effectively.
The Fix:
To avoid the pitfalls of outdated technology, brands must prioritize 3PLs that embrace innovation and automation. Here’s how to ensure your provider is equipped to meet your needs:
- Look for Automation and Robotics:
Automated picking, packing, and inventory management systems improve speed, accuracy, and efficiency. Robotics-driven 3PLs handle high volumes with fewer errors, ensuring smoother operations. - Ensure Seamless System Integrations:
A modern 3PL should offer integration capabilities with your e-commerce platform, ERP, or inventory management system. Seamless data exchange minimizes manual inputs and reduces the risk of errors. - Prioritize Real-Time Tracking and Dashboards:
Advanced 3PLs provide real-time tracking tools for inventory and shipments, giving you full visibility into your supply chain. A centralized dashboard helps you monitor performance, track KPIs, and make data-driven decisions. - Embrace Scalable Technology:
Technology should grow with your business. Ensure your 3PL invests in scalable solutions, such as cloud-based platforms and modular systems, that adapt to your evolving needs. - Choose a Provider Committed to Innovation:
Partner with a 3PL that stays ahead of industry trends, regularly updates its technology stack, and invests in cutting-edge solutions like AI, IoT, and predictive analytics.
Partnering for Success
The right 3PL isn’t just a service provider—it’s a strategic partner that helps transform logistics from a source of frustration into a competitive advantage. By addressing common challenges such as lack of transparency, inconsistent performance, scalability issues, hidden fees, and outdated technology, the right 3PL empowers your brand to operate more efficiently and deliver exceptional customer experiences. When logistics are managed seamlessly, your business can focus on growth, innovation, and customer satisfaction rather than operational headaches.
At NBD, we take pride in being more than just a logistics provider. With industry-leading technology, flexible solutions, and a commitment to transparency, we empower brands to scale with confidence. Our advanced robotics ensure accuracy and efficiency, while our transparent pricing model helps you save up to 30% on total landed costs. Whether you’re navigating peak seasons, optimizing your supply chain, or expanding into new markets, NBD’s scalable solutions and dedicated support make logistics your competitive edge.
Your logistics strategy is the difference between meeting customer expectations and exceeding them. By partnering with NBD, you gain a forward-thinking ally that prioritizes your success and adapts to your evolving needs. Ready to elevate your logistics game? Contact NBD today to learn how we help you save time, cut costs, and deliver exceptional results.
